Qatar’s gas income exceeds oil revenue

A surge in gas production boosted Qatar’s LNG export earnings to an all time high in 2010, far exceeding its crude oil revenue and catapulting the OPEC Gulf country to the top place on the world rich list.From QR94.8 billion ($25.9 billion) in 2009, the country’s sales of liquefied natural gas and associated products leaped to nearly 142bn in 2010, the Qatari central bank said in its annual report.

The gas income last year was nearly double Qatar’s oil export revenue of around QR74bn, earned from nearly 800,000 bpd of crude supplies. Last year’s gas income followed the completion of mega LNG projects at the gigantic offshore North Field, the world’s largest single reservoir of non-associated gas, with estimated proven reserves of nearly 25 trillion cubic metres.

The installation of more production trains in 2010 allowed Qatar to achieve its targeted output of 77 million tonnes per year nearly 15 years after it launched the Middle East’s largest gas development programme. The sharp rise in gas income largely offset oil price fluctuations and this allowed Qatar to record one of the world’s highest GDP growth rates.IMF data showed Qatar’s real GDP jumped by around 16.6 per cent in 2010 and is forecast to pick up by 18.7 per cent in 2011.

Qatar’s GDP shot up by nearly 26.8 per cent in 2007 and 25.4 per cent in 2008 before growth tumbled to only 8.7 per cent in 2009 following a sharp drop in oil prices in the wake of the 2008 global fiscal distress. But growth in 2009 is considered high compared with the rates recorded in other parts of the world, where it dipped to near zero or recorded negative growth.

Qatar launched LNG projects in early 1990s to tap the massive gas wealth of the 6,000-square-km North Field, which contains nearly 15 per cent of the world’s total natural gas deposits, according to official Qatari estimates.

The country, a member of the 12-nation OPEC, became the largest LNG supplier in the world when it pumped around 40 million tonnes in 2009. Production capacity is now estimated at 77 million tonnes per year and officials have not ruled out further expansion in the future to push into new markets.

In a recent report, Oxford Business Group (OGB) said it expected Qatar to retain its position as the world’s fastest-growing economy this year, with the country’s core sectors performing strongly and diversification continuing apace. “Qatar was the world’s fastest-growing economy between 2006 and 2010, with a compound annual growth rate (CAGR) of 15.7 per cent, according to QNB Capital, and the institution expects this to continue in 2011 as well,” it said.

QNB Capital, part of Qatar National Bank, has said public investments in the natural gas industry and other sectors have helped drive both “rapid growth and diversification of the economy”. The non-hydrocarbons economy achieved a CAGR of 16.4 per cent between 2006 and 2010, with sectors such as manufacturing, financial services and construction expanding rapidly.“Having survived the international economic storm largely unscathed, Qatar is now strongly positioned to continue its rapid ascent, even amid concerns surrounding the US economy’s health, the eurozone’s stability and the sustainability of China’s GDP growth,” OGB said.

“These are considerable risks, but Qatar is nonetheless in an enviable situation….. its financial system is well capitalised and has low levels of non-performing loans. The government is also able to spend heavily at a time when others are tightening belts.”

Qatar became the wealthiest nation on earth in 2010, followed by the small European state of Luxembourg.“The richest country is occupied by Qatar at GDP per capita of $ 90,149 in 2010,” the US Global Finance magazine said in a report last month.

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